Economy to face challenges in election year: CPD

The macro economy is likely to face challenges of irregularities and miss management as the country goes for the national election later this year or early next year, Centre for Policy Dialogue (CPD) said yesterday. “Public money is being plundered under the favour of the government,” alleged Dr Fahmida Khatun, executive director of the CPD, a civil society think tank. She was addressing the economic review on the “State of the Bangladesh Economy in FY 2017-18” at the CIRDAP auditorium in the capital.

Explaining their prediction, she said the irregularities may occur this year as it is the election year.

The CPD reviews the country's economy two or three times a year. The first for the current fiscal year, it discussed issues related to banking, Rohingyas and floods.

Towfiqul Islam Khan, the research firm of the CPD, presented the review for FY 2017-18.

Distinguished fellow of the CPD, Dr Debapriya Bhattacharya, Prof. Mostafizur Rahman, Executive Director Fahmida Khatun and Research Director Khandaker Golam Moazzem spoke about various issues at the end of the presentation.

Dr Fahmida was worried about public expenditure. The government may take up development projects unnecessarily, providing minimal block allocation against these projects to make the people happy. Distinguished fellow of the CPD, Dr

Debapriya Bhattacharya, believes that 2017 will be identified as the year of bank scams. He said this year the banks’ affairs do not seem to have been resolved.

“Under the circumstances, the government’s attitude towards reforms of the bank act is clear,” he said. Debapriya Bhattacharya was reviewing the economic situation of the FY 2017-18.

He said: “The macro-economic situation has become quite weak and is under pressure. The reforms brought about to handle it did not move forward, rather went backwards. The biggest example is the banking sector.”

Bhattacharya expressed concern over what happened in the banking sector in 2017.

He said bad loans increased, lack of credibility increased, capital deficit was met in state-owned banks, ownership of private sector banks was changed.

He further said the new generation banks have been approved on political grounds. For this, these banks have failed to become effective.

Along with ownership changes, money-laundering incidents have occurred in private banks in 2017, he said. “Preventive measures in this regard are absent. Rather, the government has amended the banking act and increased control of the family in banks.”

Bhattacharya blamed the weakness of the country’s economic management for the overall situation. He said there was a huge shortfall in the leadership role of the Ministry of Finance.

He identified three deficiencies - lack of necessary reforms, lack of coordination and weakness in decision-making.

Responding to a question, he said replacing an individual in the finance ministry is not the solution.

He also commented on management and policy initiatives and changes in decision making,

He said what is needed is a change in attitude and independent and strong decisions of the finance ministry. Sometimes, a decision is taken at the higher level and executed, despite it being an unsuitable one, he said.

Prof. Mustafizur Rahman said employment less higher GDP growth never alleviates poverty, rather it increases inequality.

About the current year, he suggested that the government should follow a conservative policy to manage the economy.

He also said that weak financial management of the government would affect GDP growth management

He also alleged that the country’s money is being laundered by undervoicing and overvoicing import items like cotton and capital machineries that have no import duty.

He said the National Board of Revenue (NBR) should monitor the issue seriously to stop money laundering in the name of import.

Towfiqul Islam Khan, in his presentation, said revenue mobilisation is anticipated to fall short of the target for the sixth consecutive year in FY2018. This in the backdrop of the very ambitious level set for attainment and failure of implementing VAT and the SD Act 2012. The CPD (2017) had earlier predicted that the revenue shortfall in FY2018 could be between Tk. 43,000 crore and Tk. 55,000 crore.

During July-August of FY2018, the total revenue mobilisation was 18.8 per cent higher than that of the corresponding period of the preceding fiscal year.

In order to attain the annual growth target of 43.5 per cent, total revenue will have to increase at a rate of 47.8 per cent for the remainder of the fiscal year -– which is highly unlikely to say the least, he said.

Economy to face challenges in election year: CPD

The macro economy is likely to face challenges of irregularities and miss management as the country goes for the national election later this year or early next year, Centre for Policy Dialogue (CPD) said yesterday. Public money is being plundered under the favour of the government, alleged Dr Fahmida Khatun, executive director of the CPD, a civil society think tank. She was addressing the economic review on the State of the Bangladesh Economy in FY 2017-18 at the CIRDAP auditorium in the capital. Explaining their prediction, she said the irregularities may occur this year as it is the election year. The CPD reviews the countrys economy two or three times a year. The first for the current fiscal year, it discussed issues related to banking, Rohingyas and floods. Towfiqul Islam Khan, the research firm of the CPD, presented the review for FY 2017-18. Distinguished fellow of the CPD, Dr Debapriya Bhattacharya, Prof. Mostafizur Rahman, Executive Director Fahmida Khatun and Research Director Khandaker Golam Moazzem spoke about various issues at the end of the presentation. Dr Fahmida was worried about public expenditure. The government may take up development projects unnecessarily, providing minimal block allocation against these projects to make the people happy. Distinguished fellow of the CPD, Dr Debapriya Bhattacharya, believes that 2017 will be identified as the year of bank scams. He said this year the banks affairs do not seem to have been resolved. Under the circumstances, the governments attitude towards reforms of the bank act is clear, he said. Debapriya Bhattacharya was reviewing the economic situation of the FY 2017-18. He said: The macro-economic situation has become quite weak and is under pressure. The reforms brought about to handle it did not move forward, rather went backwards. The biggest example is the banking sector. Bhattacharya expressed concern over what happened in the banking sector in 2017. He said bad loans increased, lack of credibility increased, capital deficit was met in state-owned banks, ownership of private sector banks was changed. He further said the new generation banks have been approved on political grounds. For this, these banks have failed to become effective. Along with ownership changes, money-laundering incidents have occurred in private banks in 2017, he said. Preventive measures in this regard are absent. Rather, the government has amended the banking act and increased control of the family in banks. Bhattacharya blamed the weakness of the countrys economic management for the overall situation. He said there was a huge shortfall in the leadership role of the Ministry of Finance. He identified three deficiencies - lack of necessary reforms, lack of coordination and weakness in decision-making. Responding to a question, he said replacing an individual in the finance ministry is not the solution. He also commented on management and policy initiatives and changes in decision making, He said what is needed is a change in attitude and independent and strong decisions of the finance ministry. Sometimes, a decision is taken at the higher level and executed, despite it being an unsuitable one, he said. Prof. Mustafizur Rahman said employment less higher GDP growth never alleviates poverty, rather it increases inequality. About the current year, he suggested that the government should follow a conservative policy to manage the economy. He also said that weak financial management of the government would affect GDP growth management He also alleged that the countrys money is being laundered by undervoicing and overvoicing import items like cotton and capital machineries that have no import duty. He said the National Board of Revenue (NBR) should monitor the issue seriously to stop money laundering in the name of import. Towfiqul Islam Khan, in his presentation, said revenue mobilisation is anticipated to fall short of the target for the sixth consecutive year in FY2018. This in the backdrop of the very ambitious level set for attainment and failure of implementing VAT and the SD Act 2012. The CPD (2017) had earlier predicted that the revenue shortfall in FY2018 could be between Tk. 43,000 crore and Tk. 55,000 crore. During July-August of FY2018, the total revenue mobilisation was 18.8 per cent higher than that of the corresponding period of the preceding fiscal year. In order to attain the annual growth target of 43.5 per cent, total revenue will have to increase at a rate of 47.8 per cent for the remainder of the fiscal year - which is highly unlikely to say the least, he said.